European Fintech firms have managed to secure substantial funding, even during the lockdown period that came after the COVID-19 outbreak. They’ve acquired about €2.86 billion (appr. $3.4 billion) in capital between March and mid-August 2020, according to the latest data from Dealroom.
There was a slight funding freeze back in March of this year, when the pandemic led to a global market crash. However, the second quarter of 2020 saw European Fintech firms secure €1.7 billion in funding, which is nearly as much as the €2 billion raised during the first quarter of this year.
European investors appear to be fairly confident regarding the long-term macro trends, including an expected increase in the adoption of digital services, according to PitchBook data. However, it seems that not all Fintech segments have been able to attract the same level of support from investors.
Consumer-focused Fintech firms in Europe have acquired more funding, in general, when compared to other segments, the report noted. The consumer Fintech sector may have attracted more investments because these firms continue to record significant losses, which means they most likely needed additional funding to maintain operations.
But PitchBook analysts remain bullish on the consumer segment and believe that this market will grow significantly due to a considerable increase in digital adoption. As first reported by Sifted, there have been a few decent exits recently, such as with Cardiff’s Anna Money and France-based Shine.
Europe’s alternative financing or lending platforms secured $62 million during H1 2020, which is significantly lower than the $100 million in capital they raised during H1 2019, according to PitchBook data.
The Wealthtech sector attracted substantial funding last year and was led by Fintech Unicorns like Robinhood. However, there was a 45% drop in total funding for this segment in Europe. Although consumers have increasingly been using trading apps, even during the pandemic, PitchBook analysts believe that investors may still be trying to “sort out the impact of a downturn” on these businesses.
Europe’s payments sector is expected to outperform last year’s total investments. This sector has become quite popular with traditional banks and their VC divisions, which includes Mastercard’s latest investment in invoice company, Previse.
Europe’s tech infrastructure providers still seem to be lagging behind other segments in terms of total investments received this year. However, the sector is beginning to attract more investments in the US, the report revealed.
As reported recently, Fintech investments in the Asia Pacific surged 9.1% to $1.4 billion during Q2 2020, as investors shift focus from India to Australia and other regions. The Monetary Authority of Singapore has committed $182 million to support innovation and develop Fintech projects.
As covered earlier this month, global Fintech funding surpassed $9 billion in Q2 2020, as more merchants begin accepting payments from digital wallets following the COVID-19 outbreak.